Key Post Bitcoin is a clearly identifiable economic bubble

@tecate Listened to Ruchir Sharma.
"bitcoin will replace the US$ as the world's reserve currency"
"bitcoin will do an Amazon, might take a couple of years"
And we wonder why some ordinary joes think this is lotto without the risk!
 
tecate said:
t's also hard to see how you use gold for real time censorship-resistant global payments
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You seem to be keen on the 'censorship-resistant' aspect of bitcoin. When you say censorship, I assume you are referring to money being seized or blocked by authorities ? If you're not on a sanctions list or holding the proceeds of crime, what censorship exactly are you worried about ?

The flip side of the 'censorship' you are referring to is protection to others.
 
There's a major flaw in the assumption you are making right there. Are the authorities always right? If you live in a country with a worse performing fiat currency than normal, and the government says we're implementing capital controls, you cannot maintain any other currency in this jurisdiction - dollars, etc. will have to be converted to hyperinflation dollars. Are you down with that? Because I'm not.
If you send $10 to peaceful protesters in Ottawa, is it acceptable to you to have ..
A. Your donation confiscated.
B. The government to decide to reallocate your donation to an organisation you are completely opposed to
and
C. That for having the audacity to support that peaceful protest the government decides unilaterally to freeze your account?

Lets try an example from yesterday - Do you think that it's ok for the authorities to beat up protesters in China who were simply trying to get access to their life savings ( all $6 billion having been frozen - and still is frozen right now)? Do you think censorship-resistant money would be useful to that group of people today? I do.

How about the celtic tiger saga - and Brian Lenihan being within a whisker of agreeing to a haircut on all of our savings. You might say that's reasonable - I don't - I'm not down with that in any way shape or form.

How about a world power leaning on visa/mastercard to illegally close down any and all means of funding to Wikileaks back in the day? Wikileaks went on to take donations in Bitcoin - it's what kept the organisation alive.

How about you are an opposition party in Russia - and the powers that be freeze your funds - simply because you're an opponent? Is that ok? Last time I checked, said organisation were accepting funding in Bitcoin.

I could go on - but you get the picture. And you're quite right, in that I'm not down with censorship.
 
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Duke of Marmalade said:
There is a Chinese proverb for that utterly worthless
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Yes, from the CCP - the regime that had its foot soldiers out on the streets the other day beating up ordinary joe's who couldn't access their life savings because the banks had frozen their accounts.
 
tecate said:
So we've both established that they both have other utility. How does that prevent them in the store of value use case?
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It means that BTC is not digital gold which was the proposition.

It does not prevent BTC being a store of value, but neither has it been demonstrated that BTC is a store of value.
 
time to plan said:
It means that BTC is not digital gold which was the proposition.
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I kind of see where you're going with that. If you're saying that Bitcoin has its own unique qualities - then sure - I agree with that. If you're saying on that basis, that the comparison with gold is ill fitting - I think it's helpful at this point for people to understand what its emerging as and to get an idea of what that is relative to something they already understand.
On the claim that it hasn't proven itself to be a store of value, I would say that its still in the early stages of developing in that role. Over the past 13 years, it has proven to be an excellent store of value. However, gold has had a gazillion years to prove itself in that role. I've no doubt that Bitcoin needs more time to do so also.
People are also citing short term volatility as an inability of Bitcoin to act as a store of value. I don't think short term volatility is helpful but I don't think it disqualifies it as a store of value. Of course, what would be optimal is if it become less volatile - which many expect to happen.
 
So you're saying that BTC has both proven itself an excellent store of value and needs more time to prove itself a store of value. Got it.
 
tecate said:
And I disagree - we can't say that definitively
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Well, we can say definitively that Bitcoin has not behaved like gold during the recent stock and bond market drawdowns.

Maybe that will change in the future but the past is the only guide available to us in the absence of a crystal ball.
 
Sarenco said:
Well, we can say definitively that Bitcoin has not behaved like gold during the recent stock and bond market drawdowns.
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Hasn't gold being falling over the past few months? Anyways, everything usually suffers when the crap hits the fan including gold - and then takes off afterwards. To your point, over the shorter run, Bitcoin has not - but how could it if you think about it? We had the likes of the guy that featured in the article that you quoted - participating in a hype cycle. Bitcoin was already way up.

These hype cycles will be left behind at some stage. Some here think that means Bitcoin dies afterwards. I don't believe that. The hype cycles are both useful and cringe at the same time. I'd much prefer a boring Bitcoin and digital assets market - but we'll have a while to wait for that to pan out yet.

Sarenco said:
Maybe that will change in the future but the past is the only guide available to us in the absence of a crystal ball.
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If you open the timeframe out to the past 13 years rather than the past 6 months, Bitcoin has acted quite well as a store of value.
 
Do you have any peer reviewed articles in learned journals that support your position that data proves undeniably that BTC has acted as an excellent store of value over the course of 13 years?
 
time to plan said:
Do you have any peer reviewed articles in learned journals that support your position that data proves undeniably that BTC has acted as an excellent store of value over the course of 13 years?
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Pull up a chart of bitcoin over the course of its 13 years and tell me that it didn't at the very least maintain its value against the sovereign currency of your choice. Or better yet, scroll back to post #510 and click on the link to the chart that's posted there - that plots btc against gold - and see which has performed better.


time to plan said:
So you're saying that BTC has both proven itself an excellent store of value and needs more time to prove itself a store of value. Got it.
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I said that it has acted as an excellent store of value over the course of 13 years. That's undeniable - the data is there to prove it (and no, cherry picking timeframes doesn't in any way disqualify that). What I've also said is that it remains an immature asset - and it continues in its development. I don't assume anything - and I don't assume that it continues to be a good store of value. Given that gold has been afforded a gazillion years, I think we should wait until the asset matures before passing final judgement.
 
So this will be published in peer reviewed articles presumably? If it's undeniably proven?
 
Was Amazon a good store of value? Was a lotto ticket that hit the jackpot a good store of value? You do not decide whether something was a good store of value with hindsight.
A good store of value is something that makes you feel secure that it won't lose its value tomorrow, and let's you sleep easy at night.
The guy in the parable quoted above set his alarm every hour to check the bitcoin price during the night. Was it acting as a good store of value for him?
Rather than store of value bitcoin was one heck of a crazy roller coaster ride which for some has them still in the black but probably for a majority of current holders at this stage in the red.
 
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time to plan said:
So you're saying that BTC has both proven itself an excellent store of value and needs more time to prove itself a store of value. Got it.
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Ah, but these things take time. Bitcon is only doing the rounds for the last 13 years. Any decade now the penny will drop and we'll all be buying stuff with Bitcon.
 
tecate said:
scroll back to post #510 and click on the link to the chart that's posted there - that plots btc against gold - and see which has performed better.
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That's the point....it shouldn't perform "better" - it should move, broadly with gold, but it hasn't. It's not behaving like Gold at all (as a store of value in uncertain times). And nobody in any large numbers are using it to buy things (i.e. as a currency) - so what exactly is it being used for?
 
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